Coronavirus Update: Nonprofit & Social Sector

Raffa Financial ServicesRaffa Financial Services on 04/01/2020

Industry overview

Each hour the headlines about the coronavirus pandemic raise our anxiety level. And while fear is a natural reaction, we must move our communities from fear to action for good. And who best to do this than the nonprofits that spend a good part of their lives working for others and for social change?

During such times, many more people are and will be in need of the help that is offered by many of our nonprofit organizations. And with more demand comes the need for more funding. Sadly, it is during these times that fundraising also become the most challenging. Fundraising events are cancelled, foundation earnings and corpuses that fund grants are in turmoil, the corporations that may be your partners are dealing with total shut downs, and individuals in fear of the unknown are likely concerned more about the immediate needs of their own families than those in their communities.

The approach

  • As a leader, your priority should be to communicate the situation frequently and openly with your staff, board, funders, donors and suppliers. For donors, focus on existing relationships. Build further trust with these stakeholders. And be sure to communicate the positive impact your organization is having to anchor their support.
  • Don’t be afraid to ask more of those that have given before. And don’t just tell them how much money you need but how much you need to do and the impact you can have given your prior accomplishments.
  • With limited resources should come a refocus of your core mission. Think very critically on what can be done effectively with your current and projected funding. It is likely we may not feel the full fallout from the pandemic until the virus itself is under control. So be sure to plan very conservatively on the dollars that may come in through the end of the calendar year.
  • What may seem important is outcomes and long-term survival, but the reverse is also true. Understanding resources will be limited, don’t be afraid to shift these resources to the one thing your organization excels at.
  • Look around you to find other businesses (nonprofits and for profits) that are complimentary to your work. Find ways to partner employing the strengths of others. The social ills that effect our communities could not previously be resolved by one provider. There is no reason to think this need for collaborative efforts won’t by magnified with this pandemic.
  • You need to manage any cash and cash flow you may have. Resist across-the-board cuts. It will work temporarily but the program or programs you intend to focus on may become ineffective. Think more strategically. Decide on the programs that will need to be eliminated and then think about cost-savings within the people, activities and programs that will remain. Eliminating or delaying unnecessary expenses may seem obvious, but look for other less expensive ways to accomplish some of the same things (e.g., replace travel with technology). Ask your suppliers for delayed payment terms, reductions in their charges, in-kind donations. No one should escape such requests: landlords, bankers, etc. Think about an overall reduction in compensation for your staff. It may be better for everyone to take a 25% cut in pay rather than to cut 25% of your workforce.

There is not one right answer to navigating uncertain times, only our experience based on strategies and tactics that will lead your organization to making sound choices. These same strategies are at the core of sound management during good times. They become even more critical now.

 

 

Is your benefits broker also a compliance consultant? What about a trusted business partner? Are you confident your policies and processes are doing what they need to ensure that your company—and your employees— are healthy and productive?
Photo by lekstuntkite

This article was originally published on Marcum Accounts and Advisors


Thomas Raffa
National Leader of the Nonprofit and Social Sector Group

Raffa - Marcum LLP
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